EUR/TRY Breaks The Short-Term Upside Line

by Darius Anucauskas
11:31, 2021/06/10

After hitting an all-time high, at 10.724, on June 1^st, EUR/TRY took course south. Yesterday, the rate ended up falling below the short-term upside support line drawn from the low of March 22^nd. This might have indicated that the bears are preparing to push the pair further down. To support the downside scenario, at least in the near term, we can see that the rate is still trading below a short-term downside resistance line taken from the high of June 4^th. Given all of the above, we will continue aiming lower.

If EUR/TRY drifts further below the 10.389 hurdle, marked by an intraday swing low of June 1^st, that could invite more sellers into the game, as the rate would also be placed below the 100 EMA as well. Such a move may open the door for a move to the 10.326 hurdle, marked by the low of May 31^st, which could provide a temporary hold-up. The pair might even rebound from there, however, if it stays somewhere below the above-mentioned downside line, another slide could be possible, as the bears might take advantage of the higher rate. If so, EUR/TRY could end up falling back to the 10.326 obstacle, a break of which may lead to a test of the 10.285 level, marked by the low of May 27^th.

The RSI and the MACD are both pointing lower. In addition to that, the RSI remains below 50 and the MACD sits below zero and its trigger line. The two oscillators indicate increasing downside speed, which suggests further declines might be possible.

Alternatively, if the bulls are able to push the pair through the previously discussed downside line and then lift the rate above the 10.500 barrier, marked by yesterday’s high, that could attract more buyers into the game. EUR/JPY would be back above all of its EMAs on our 4-hour chart and might drift further north. It may travel to 10.556 obstacle, a break of which could set the stage for a move to the 10.603 level, marked by the high of June 3^rd.

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